On January 1, Year 1, Prairie Enterprises purchased a parcel of land for $13,100 cash. At the time of purchase, the company planned to use the land for a warehouse site. In Year 3, Prairie Enterprises changed its plans and sold the land. Required a. Assume that the land was sold for $14,541 in Year 3.

1. (1) Show the effect of the sale on the accounting equation.
2. (2) What amount would Prairie report on the Year 3 income statement related to the sale of the land?
3. (3) What amount would Prairie report on the Year 3 statement of cash flows related to the sale of the land?

b. Assume that the land was sold for $12,314 in Year 3.

1. (1) Show the effect of the sale on the accounting equation.
2. (2) What amount would Prairie report on the Year 3 income statement related to the sale of the land?
3. (3) What amount would Prairie report on the Year 3 statement of cash flows related to the sale of the land?

Assume that the land was sold for $14,541 in Year 3. Show the effect of the sale on the accounting equation. (Enter any decreases to account balances with a minus sign.)

PRAIRIE ENTERPRISES
Year 3 Accounting Equation
Assets		=	Stockholders Equity
Cash	Land	=	Common Stock	+	Retained Earnings
		=		+

Assume that the land was sold for $14,541 in Year 3. What amount would Prairie report on the Year 3 income statement related to the sale of the land? What amount would Prairie report on the Year 3 statement of cash flows related to the sale of the land?

a-2.		of
a-3.

Assume that the land was sold for $12,314 in Year 3. Show the effect of the sale on the accounting equation. (Enter any decreases to account balances with a minus sign.)

PRAIRIE ENTERPRISES
Year 3 Accounting Equation
Assets		=	Stockholders Equity
Cash	Land	=	Common Stock	+	Retained Earnings
		=		+

Assume that the land was sold for $12,314 in Year 3.

What amount would Prairie report on the Year 3 income statement related to the sale of the land? What amount would Prairie report on the Year 3 statement of cash flows related to the sale of the land?

b-2.		of
b-3.